Starmer won’t rule out stealth tax raid on incomes as Labour MPs say 'mansion tax on way'
Kemi Badenoch pressed Sir Keir Starmer on income tax plans in Budget at PMQs
Sir Keir Starmer failed to rule out freezing income tax thresholds in a move that would break a Labour manifesto promise.
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Asked at PMQs by Kemi Badenoch to ‘come clean’ over whether Labour would freeze the thresholds, Sir Keir refused to be drawn on the contents of next week’s Budget.
He said: “The Budget is actually next week, but I can tell her it will be a Labour Budget with Labour values, that means we will focus on cutting NHS waiting lists, cutting debt and cutting the cost of living.”
“This is the first Budget to unravel before it’s even delivered,” Mrs Badenoch said.
“When the Chancellor made that promise to unfreeze the thresholds, it wasn’t an off-the-cuff comment.
“She said it on the floor of this House in her Budget speech. That was a deliberate statement of Government policy.
“So if she breaks such a clear promise, how can the public trust a word she says next week?” She added.
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Nearly 500,000 in London and the South East face being dragged into paying the higher rate of income tax if the Chancellor extends the six-year freeze on thresholds by a further two years to 2029/30.
It is widely expected that a so-called mansion tax will be introduced in the Budget.
Hitting London and the South East hardest, it is believed the tax could be imposted on homes worth more than £2m, potentially with a one per cent levy on the value above this level of the properties.
It would leave owners of properties worth £2.5 million having to pay an extra £5,000 a year in tax, or just over £400 monthly, while a £3 million home would owe HMRC around £10,000 annually, or close to £800 a month.
Some reports suggest that Ms Reeves may even target properties worth over £1.5 million, which would mean tens of thousands more homes in London being caught by her latest tax grab.
Other Budget measures could include a more hefty bank levy, restrictions on pension salary sacrifice schemes, a new road levy for electric vehicles, and limits on a salary sacrifice scheme for cyclists to buy bikes.